Stocks rose on Friday, with each of the major indexes gaining more than 1 percent, as data in China allayed concerns about a further slowing of global growth and as bank shares advanced after the release of JPMorgan's earnings.
Shares of JPMorgan Chase & Co (JPM
) leapt 4.4 percent to $35.52 after it reported $4.4 billion of credit trading losses in the second quarter, but still earned an overall profit of nearly $5 billion.
Data showed growth in China slowed for a sixth straight quarter to 7.6 percent, better than some in the market feared, but low enough to keep open the possibility that more action may be taken by policymakers.
"The market had drifted a little bit lower each day this week, but the data out of China suggested that things are not all that bad, and that's giving a relief rally," said Randy Frederick, managing director of trading and derivatives with the Schwab Center for Financial Research.
"But I think the rally today is a lot stronger than it should be, and I don't expect this to continue for very long. I wouldn't expect the market to close at current levels today."
The S&P 500, which ended lower in five out of six of its most recent sessions, recovered most of its weekly loss on Friday, and was down just 0.4 percent for the week.
The Dow Jones industrial average (^DJI
) was up 162.19 points, or 1.29 percent, at 12,735.46. The Standard & Poor's 500 Index (^GSPC
) was up 16.44 points, or 1.23 percent, at 1,351.20. The Nasdaq Composite Index (^IXIC
) was up 29.66 points, or 1.03 percent, at 2,895.85.
The CBOE Volatility index (.VIX), Wall Street's so-called fear gauge, fell 7.8 percent to 16.91.
Stocks saw a notable jump at 10:06 a.m. (1406 GMT) as 39,345 e-mini contracts traded, the single busiest minute of the session so far, indicating the presence of a big buyer.
JPMorgan, the biggest U.S. bank by assets, said it had lost $5.8 billion in 2012 from disastrous credit bets and that its traders might have tried to conceal the extent of the losses earlier this year. About $4.4 billion of those losses came in the second quarter, thought the bank still generated nearly $5 billion of overall profit for the period.
The bank said it would restate its previously filed interim financial statement for the first quarter.
"JPMorgan earnings are helping sentiment," said Peter Bookvar, equity strategist at Miller Tabak & Co in New York.
"Banks are very strong and that's leading the way, plus we have an oversold, nervous market and that's why we're rallying."
Shares of another bank, Wells Fargo & Co (WFC
), rose 2.6 percent to $33.69, after the biggest U.S. mortgage lender reported second-quarter earnings that beat estimates on strong mortgage banking income and improved credit quality.
The KBW bank index (^BKX
) climbed 2 percent [ID:nL2E8ID2DX]
Labor Department data showed U.S. producer prices unexpectedly rose 0.1 percent in June, against analyst estimates for a decline of 0.5 percent.
The Thomson Reuters/University of Michigan Surveys of Consumers preliminary reading on the overall index on consumer sentiment fell to 72.0 from 73.2 in June, shy of expectations as Americans took a dim view of their finances and job prospects. (IDLnL2E8IBEO8)
(Additional reporting by Chuck Mikolajczak; Editing by Bernadette Baum)